Karex to buy Medical-Latex for RM13mil


  • Business
  • Thursday, 13 Aug 2015

Condom maker: File picture showing workers at Karex Bhd’s factory in Port Klang packaging the company’s condoms, which are then distributed to countries worldwide. Karex is proposing to buy Medical-Latex for RM13mil.

PETALING JAYA: Karex Bhd is proposing to buy the entire equity interest in Medical-Latex (Dua) Sdn Bhd (MLD) from Beiersdorf Aktiengesellschaft for RM13mil.

Karex said the acquisition would allow it to build on MLD’s reputation as one of the leading premium quality condom manufacturers. It would allow Karex to acquire MLD’s own brand manufacturing product, under the Enjoyable Safe Pleasure (ESP) brand.

“Karex believes that it will complement Karex’s existing brands as well as the recent acquired ONE® brand in the markets that Karex is going into. Karex believes it can grow ESP further, taking advantage of its current network,” it said in its filing with Bursa Malaysia.

The purchase consideration of RM13mil considered MLD’s net asset value, the revaluation gain of leasehold land and buildings of RM4.4mil and its future growth prospects.

Karex said the purchase price represented a price-to-book ratio of about 1.09 times based on MLD’s net assets as at Dec 31, 2014.

“Simultaneously with the completion of the proposed acquisition, Karex will settle the outstanding loan including accrued interest thereon amounting to RM2mil in aggregate owing by MLD to the vendor (Beiersdorf ),” it said.

Also, Beiersdorf has appointed MLD as the exclusive supplier of all condoms specified in the supply agreement, which is on a five-year renewal basis.

Under the term of the supply agreement, Karex has a right of first refusal to any proposed disposal of Beiersdorf’s condom brands Duo and Harmony.

MLD manufactures Beiersdorf’s condom brands such as Duo and Harmony for the European and Latin American markets. It also has its own in house brands such as ESP (Enjoyable Safe Pleasure) and N’Joy.

MLD is located about 2km to the Senai International Airport, 40km to the Pasir Gudang port and 50km to Karex’s existing Pontian’s plant.

It currently occupies only 30% of its land size of 6 acres.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

Across the site